RT HON ESTELLE MORRIS, a Member of the House, Secretary of State for Education and Skills, examined

Chairman

Secretary of State, as people are settling down can I do a commercial for the Committee's latest report on Post-16 Student Support, which has been delivered from the printers. For the journalists here who would like a copy, can I tell them that whatever they have read in the press, they have not heard half the full story, or even a quarter, so here it is available but embargoed until 6 o'clock in the morning. There will be a press conference tomorrow at 12 noon in the Boothroyd Room. The Chairman of the Science and Technology Select Committee would like me to say that they have a press conference in the Science Museum tomorrow at 10 o'clock on their latest report. Secretary of State, thank you for coming again. It was quite a momentous occasion, if you remember, when we were doing what we called our baseline assessment in October of last year. If I remember, you were slightly delayed for the start of that meeting by something called the ILA, and of course that gave us a lot of work in this Committee after that. I do hope you share the view, and I think you do, that the Committee's report on that was constructive in terms of the next phase.

(Estelle Morris) Indeed, Chairman, it does give the opportunity to not only thank the Committee for the work on that report but on other reports, but I have to say when we return that you might accept the then Minister, Mr Healey, was more open with you beyond the call of duty and certainly beyond the words on the written page. I have certainly found, from the department's point of view, that the whole of that interchange was very useful to us, and I welcome the openness and the straight talking. I hope that when we launch ILA 2 it will reflect some of your concerns and is a better product because of the way I think we jointly dealt with the issue throughout the year.

Secretary of State, I am going to ask you to say a few opening words in a moment, but just to come back on that, we found that the level of frankness, openness and constructive dialogue we had with the Minister, John Healey, on that did set the kind of standard that we hope will be maintained across the piece in future. It was just refreshing, even in terms of your department's response to our inquiry report, and a very good level. Can I invite you to say a few words to start this session?

(Estelle Morris) I did give some thought, Chairman, to opening words, and the trouble with opening words is that you end up repeating them because somebody asks you a question on whatever you decided to say. So I decided not to actually say a lot of opening words. I was going to thank you, and I have already done that. Given that baseline assessment happened last time, this is value added, and I suppose I have my own thoughts as to where we have really added value as a department over the last year, and as ever in the life of policy development and implementation there are some areas where we have done more work and made more progress in the past 12 months - and that includes secondary school reform and trying to sort out ILAs at the beginning of our FE strategy - and there are areas that we still have to address, in terms of the strategy document, perhaps at the end of October/beginning of November, for higher education. Rather than going through all those areas I would sooner put the facts on record and pledge my commitment to try and maintain an open relationship, and get on with it.

Excellent. We have got you for an hour and a quarter. Let us get on with it. Can I open the questioning by saying to you, Secretary of State, when you are running the department, and when you are looking at how you are trying to achieve your goals for the department, obviously it is team work, and you have had some very talented people in your team. How disconcerting is it for you, as a team-player, manager, team-builder and motivator, to have key members of your team plucked away from you after 11 months?

(Estelle Morris) I lost two good ones and gained two good ones. I think I have as strong a team now as I have had. You have to put that in context, it is a department that has incredible ministerial continuity. I myself have been there in each of three posts on the schools side since 1997, and the Permanent Secretary I worked with was Director General of Schools for two years before the 1997 election. Mrs Hodge pulled the average age up of the ministerial team considerably, other members of staff have been there for two years before 1997 and we have the three youngsters as well. I think, inevitably, as far as John Healey and Stephen Timms are concerned, they are both moving to departments where they will get new experience, and that is the life of a minister and of a politician - everybody knows that you cannot bet on being in a second job tomorrow or the same job after the next election. I do not feel as though I have been disturbed in that sense. We have got continuity and I do not feel as though the team has been thrown in the air and had to start again.

Secretary of State, we would be disturbed if you moved on very quickly.

(Estelle Morris) I am glad to hear it!

In the sense not only that some of us might think you are doing a good job, but the fact that if you walk along what I call the "corridor of remembrance" outside your office and see what a short time so many ministers of education and secretaries of state have actually lasted in the department, one of the refreshing things is that your predecessor stayed a full term and you seem to be making a good start on that as well. Coming back to the schools, Minister, school standards, only 11 months. It is a very complex area. You were there in schools for quite some time.

(Estelle Morris) Indeed. I think I did a one-year/three-year split. I think if you went to any other organisation and looked at it over a six-year period you would probably find that the change of personality at senior level was more than it has been in our department. All I can say is that ministers are entitled to accept opportunities in other government departments for breadth of experience and I do not feel that we are an unstable team. I think we have benefited from stability. Indeed, the previous Secretary of State was there for a full term. There have been a few changes among senior officials, to tell you the truth, but I do not go into the department and feel as though it lacks stability - the very opposite. Some of us have been there long enough now to pick up the consequences of our earlier decisions. I think that is an incredibly helpful position for ministers to remain in.

Let us get down to the meat of this meeting and start by explaining for us, here we see a period of practically unprecedented spending on schools - particularly on schools - and increases in resources. We have just been told by our specialist adviser (and if you think you have had continuity, I think our special adviser on this, from the London School of Economics, Professor Trevors, has been with the Select Committee for 17 years) that here is a period of massive expenditure on schools, yet in some parts of the country, in some schools you visit, there is a feeling "Has it trickled down? Has it gushed (never mind trickled) down? Has it really impacted?" There are teacher shortages in some parts of the country, and a feeling that teachers are under stress, that there are problems. Can you explain to us this dichotomy of unprecedented (this Committee will accept) levels of expenditure into schools yet this feeling that it has not kind of delivered yet?

(Estelle Morris) The teachers' feeling under stress is slightly different and if I may I will concentrate on the money. The money has got to schools. The money held back by local authorities is less than it was. The pass-through rate from LEAs to schools has increased and I applaud and thank local authorities for that. I believe our own department's running costs have actually decreased and if you look at the funds of departments across the board we have done quite well. When I go to schools I ask the very same question and I get the same response "We need more money". I then always follow it up with "But have you got more money than you had in 1997? Have you noticed a difference?" They say "Yes, but". I do not think I should ever go to a school and worry if the teacher left me thinking they have got enough money; they see it as their mission to say "We need more money". I do think it is beholden on us to actually say "But aren't you getting more than you had?" It is a very different question. There are a number of other things I have learned: they do not count capital as money. If they do not control it they do not count it. So if they have had an extension or a new school building or repairs to the roof they do not actually see that as capital. The amount of money that we spend on the National Grid for Learning or the literacy and numeracy strategy they often do not see as money themselves. So it partly depends on how it is routed through to them and how much influence they feel they have on how it is spent. There is another factor, and this goes a little bit into what you said about teacher numbers: most of them have used the money to create new teaching posts, which is an issue I have been discussing with the profession for nearly a year now. What then happens is that that becomes part of the baseline commitment for the next year round, so your next year's spending commitment actually ignores the extra money you put in for increasing staff in the previous year. So I wish they said "This is brilliant, the money is showering down on us, we have never had it so good". I do not expect them to say that but these days I rarely find anybody who says their financial position has not improved since 1997.

Ms Munn

I want to move on to talk a bit about the link between finance and targets and look particularly at the departmental report. Focusing in on just one area - and I know other colleagues will come in on other areas - and looking at Sure Start, which is an initiative which has been widely welcomed, we find that at the moment there is less to report in that a lot of the Sure Starts are in their early stage and there has been slippage, perhaps, in implementing them. With that background, and given the idea that Sure Start is supposed to have a long-term increase over many years, because it is about giving children that sure, early start, are you yourself happy that the targets that are there which are linked to more finance etc are the right ones?

(Estelle Morris) Yes, but they need to be looked at as we progress and at each spending review we look at our PSA targets and make sure that they are fit for purpose. Sure Start is interesting because I think it was two things. I think, possibly more than any other programme run by our department, it was about process as well as outcomes. That is part of the reason for my departmental underspend, which I noticed you raised with the |Permanent Secretary last week. What we tried to do was to have projects that started at the base and grew up, and actually rooted themselves in the community. So the early targets were about process; they were about setting them up, about contacting children. I could present to you a most brilliant report on Sure Start but it has not actually reached the children and the parents and contacted them within however many months of birth. It will not work. So I look at the amount of money going to Sure Start, I look at the targets and I do, too, note that they are input rather than output achievements at the moment, but that will change over time. I am very happy to make the commitment that what we expect to get out of Sure Start we will get out of Sure Start, which is improvement in social development, emotional development and cognitive development and, I think, parents who are more active partners in their child's education, greater well-being and greater cohesion of provision of services to families. I just say that it has been an incredibly slow process but for defensible reasons, and I think the targets are right for now but they are not right forever.

Given that some of those targets are less easy to measure because they are not about numbers (and do not get me wrong, I am not somebody who wants to have lots of numbers because I think we end up sometimes measuring what we can count rather than what is important), do you really think it is going to be possible to be able to quantify the benefits of Sure Start in terms of how children are doing, maybe, five years down the line in their education and general social well-being?

(Estelle Morris) Yes. What we have to remember is the US programme Head Start, which did not start to think about its results until 18 years after it started. Part of the evidence they gave for success was how well those youngsters brought up their own children and became effective parents. I suppose governments have got to look medium and long-term. You are right, probably with the amount of money we put into Sure Start, the Prime Minister and Chancellor could have given it to me elsewhere in my budget and we might have seen more immediate results, but it is right to invest for the long-term. Somebody once said to me that the best thing they thought we had done in our department was the early years policy and Sure Start was the thing that we would get the least recognition for because it was essentially medium-term and long-term. However, I would not be looking to 18 years. What I would be saying is that given that we have now got baseline assessment when children went into school, I would not be disappointed if, over time, the youngsters that had had the investment made by Sure Start did see that reflected in the baseline assessment when they started their formal education.

Given this approach of linking finance and investment to outcomes, and given what you said that there might be some delay, are you going to be able to continue to defend and, possibly, expand the programme in the future?

(Estelle Morris) Yes, but I have been looking across the piece in what we have got in early years at the moment, and there are a lot of titles - neighbourhood nurseries, community, nurseries, early excellence centres, Sure Start - for the plain old nursery we used to know when we were little. I do think, as I said to the department, that the time has now come, in my view, to make sure that that makes sense and not to cut back on provision. I have asked myself the question, what is the difference between an early excellence centre and a neighbourhood nursery and a community nursery? We have to ask that question and make sure parents are asking that question as well. So I am very interested (and I hesitate to use the word "rebranding" because I do not mean that) in making sure that the whole of our early years provision is as simple to explain to its clients, to its customers, as possible. It has got like that for the best of reasons. As we have tried to meet each new need and as we have got more resources that we have been able to invest in early years, we have not always thought "Let us just pile it all into Sure Start"; we were almost starting from scratch in some areas - absolute scratch - in terms of government investment in early years. For instance, how do you tackle the pockets of deprivation in otherwise affluent areas? Is Sure Start always the model for rural areas? Are early excellence centres? Should Sure Start be attached to schools? To some extent we have been piloting a lot of those initiatives, but I very much hope that over the next two years, as part of our new work after the spending review, maybe the name and shape of it might be slightly different, but that is only because it is almost rationalising it and makes sense of what we have created. I do expect to be able to continue to invest in that area.

Mr Baron

Secretary of State, as referred to earlier, there has been a real shift in total spend but, also, the proportion of spend towards schools in recent years. Yet going round the schools in my constituency the number one issue is teacher retention and recruitment. In other words, it does not seem as though the money is having much effect, and when questioning teachers and headteachers about this they seem to be suggesting that it comes down, at the end of the day, to workload. This issue of workload has been used as a political football in the past - too much. Is there a connection in your view between the fact that we seem to find it difficult to retain our teachers - and there is an annual resignation rate of something like 15 per cent, very roughly, and something like one in five teachers leave during their first three years - and the workload that we seem to be putting on to our teachers?

Just as a response in terms of the background of figures, I want to keep every teacher in the business, of course I do, and of course I worry about retention, and I am not pretending that it has not got slightly worse in the last two years. However, we have very many teachers. We recruit 30,000 teachers a year. That is the target that we have to get. We are the biggest recruiter of labour into a profession every year, year on year, more than any other single profession. I think 80 per cent of them actually teach in the maintained sector during the first five years. However, you also have to look beyond the figures sometimes, and if somebody leaves teaching - it is a 75 per cent female population, some will leave to have babies, some will leave to take maternity leave or take a break to bring up the families - they count as leavers. They also count as leavers if they are in a relationship where their partner gets a job elsewhere and they leave at Easter but find a new job in September in a new area of the country where they have gone to live with their family. They count as having left the profession. One of the figures you do not use and you must use is that 13,000 return to the profession each year - 13,000. Some of those will be from having brought up a family and some will be from having had time out to move house. I am not complacent, (and I do not want to be critical of teacher unions) and I know there is a problem in terms of teacher recruitment and retention, but it does the service of the children no good to actually cry it up more than it is. If people would just use the fact that 13,000 return to the profession each year as much as they do the fact that there has been a slight increase in the number of people leaving, I think you would get a truer picture. Just on the link to workload, there are 20,000 more teachers than there were in 1997. Nobody is denying that, nobody is challenging it, nobody is saying we are spinning the figures and making it up. It is true. There are more classroom assistants, there are more bursars. So what you cannot do is tie any increase in pressure that teachers feel that they have got on them to fewer teachers, fewer support staff in the classroom - the match is not there. It is about something else, which I can comment on, but it is not about the reduction ----

Mr Baron: Point taken, Secretary of State, but the fact is that whether you talk to OFSTED or the NUT or unions generally, and indeed teachers and headteachers themselves, their view is that the workload is the key factor as to why teachers ae leaving the profession. It cannot be denied that in recent years the figures have been getting worse. Yes, we are recruiting them but we have trouble keeping them, and this is the problem. That is why there are quite extensive teacher shortages across the country. I do not want to turn this into a political football, and I think you recognise there is a problem but I am interested in looking forward as to how we are going to try and put this right. That is the number one issue in schools, certainly in my patch, at the moment.

Chairman: Can we ask for slightly shorter questions?

Mr Baron

Let me give you one example, if I may, Secretary of State: during September last year, in the busiest period, documents were sent to primary schools with something like over 400 pages, and sent to secondary schools with something like 390 pages, which would have taken your average headteacher one-and-a-half days to read in a typical month during the busiest month of the year. That is the sort of issue that headteachers are raising with me. What are we going to do to address that?

(Estelle Morris) Can I suggest that I do not suppose there was a headteacher in the country who actually ploughed through the pay and conditions document that was well over 100 pages that also gets sent to schools. Come on. These are intelligent, bright, professional people. Does any Member of this Committee plough through every document and every word of every paper that is sent? Mr Shaw does. I tell you what I do when I get to my constituency office on Friday, I bin more than half of what is sitting on my desk because it is brochures and such like. This is a serious conversation, Mr Baron, but it has to be about what is real. If you crammed in that document the whole of the Key Stage 3 strategy, which is actually a teaching and learning document, to last us over the years ahead and then say that teachers have to read all of that as well, that is not the real world.

If I may say so, Secretary of State, what do you say to the teaching unions, OFSTED, the headteachers and teachers in my constituency who say that workload is the number one issue - forget documents ----

(Estelle Morris) I would be delighted to forget documents.

That is why teachers are leaving the profession and we are having trouble recruiting.

(Estelle Morris) I think workload has increased. I think we ask more of our teachers than any previous generation of teachers and ask more than the Secretary of State asked me when I was teaching. I cannot change. I do not want to change that, because what they do is so important. At the moment the mood in the public is to want better public services. Every parent wants the best for their child, and that is good. That pressure from our joint customers, the general public, parents and pupils, puts tremendous pressure on teachers to achieve. That is the world we live in and that is why I applaud teachers for the work they do. What I often say to them is to put themselves as citizens. If they have got a grandmother or a parent who is going to hospital, or they have got somebody in social services care, or they travel by train on the railways, do they not, as citizens, demand better public services? They do not realise when they are demanding better public services that that puts pressure on those who work in the public services, and it does. So my answer to that is I cannot do anything about the extra demands because the extra demands are right in the most important of all the professions. What I can do about it is see how we manage those demands. So the conversation I have with the teacher unions is "Let me look at what teachers are doing that somebody else could do." Twenty per cent of their tasks people say could actually be done by somebody else. I could list the things that we could all agree teachers should be doing, and I can actually say "How can we actually support the profession into the 21st century?" because they do not have the level of support the professions have the right to expect. Any of us on the Committee who have been teachers and moved from teaching to politics saw the difference in support that we got overnight on the change of job. I saw it in 1992 and I would imagine it is even more measurable now. They have a right to expect the support, but we have a right to demand something of them. So my debate - and I know I have not solved the problems - is not how can they work less hard, but how can I make sure they are able to use their time commensurate with the skills and qualifications they have got? That is the nature of the discussion I need to have with the profession.

Mr Pollard

Just a quick question, Chairman. Some years ago, Secretary of State, five, six and seven-year old class sizes were brought down to a very welcome 30. Has that made any difference to the number of teachers required?

(Estelle Morris) Of course. If I remember rightly, I think it was 12,000 extra teachers that were required for that. I must admit I have not used that figure for a while, but I am almost sure about that. It has. However, even if you take that out and look at the overall number of teachers, it is still a significant number increase in teacher, but we did need more primary to meet the class-size pledge.

Chairman

The Chairman of IPPR who used to be advising policy now thinks that, over the country, the 30 limit was probably a waste of money and that the money, targeted better, could have been more effective. Are you familiar with that criticism?

(Estelle Morris) I read the coverage of it but I do not agree with him. I think our decision to have that as a commitment was based on what OFSTED said about the importance of smaller classes in earlier years. I think it is great that the nation now has not got five, six and seven-year olds in classes of 45, and that is what they had in 1996. I think it is money well-spent and well-invested.

Mr Chaytor

Secretary of State, you mentioned the departmental underspend earlier. Could you remind us what the total underspend was for last year?

(Estelle Morris) It is either £1.3 billion or £1.6 billion.

Earlier this week the Chairman of the General Teaching Council, who claims to speak to you up to five times a week, was quoted as saying that further education is in a "potentially catastrophic state. The present situation in FE is completely unsustainable. It's risible, frankly. Salaries in FE are an embarrassing joke." Do you intend to use some of that huge underspend to respond to his criticism of the situation in FE?

(Estelle Morris) Two things. Not the underspend. In fact, I made clear when I spoke to FE and other post-16 staff that I would not use the underspend for that. Just on the underspend, half of it is in ring-fenced budgets. I am not going to repeat evidence given by my Permanent Secretary, but a lot of it is in Sure Start, a lot of it is in the Children's Fund that I cannot switch to my general budget and a lot of it is capital. So it is not that it will not ever be spent, it is about re-profiling it. It will be spent in subsequent years. I think I have used some of it for the Havering initiative (?) which we launched in 33 LEAs with the highest truancy and the highest crime rate. I will correct myself if I am wrong on that. I know I have used £66 million and I think it was from the underspend, but I will clarify that. I will tell you why I do not want to use the underspend, because it is rather like the school budget: you cannot spend it once and then not put it into your baseline for the next year. So it is not the way to do that. I do acknowledge that partly "life is not fair, is it" but partly as a result of our decision to put more money into teacher pay we have widened the gap between FE pay and teacher pay. I cannot defend that except to say that we live in the real world and when you are trying to change things as radically as we are you have to do it orderly, but what you have to be is absolutely clear about what the order is. My predecessor was never but not honest about saying that schools were a priority and the early years were a priority between 1997 and 2001. I do not make any excuse about FE salaries, I do not like the nature or the number of people on short-term contracts and the lack of stability in the FE workforce, and I do find it difficult, in front of an FE audience, to justify that we have increased teachers' salaries so much to open the gate. I only wish I got a bit of recognition from the teachers, but that is life. So you lose out at both ends. So it is not the ideal situation but you have to do things in order and as and when you can.

Can I just clarify? You did say you were using part of the underspend for the college pay initiative? How much will be allocated for that?

(Estelle Morris) For the college pay initiative? I do not think I am. No, I am not using the underspend for that. I will send you a note. I have used some of the underspend into the college of FE. I can recall, for instance, that I put some of it into e.learning, I put some in for training for non-teaching staff and we have made an announcement about the teachers' pay initiative for the non-teaching staff as well. I would sooner drop you a note about that.

As yet there is no specific budget allocation for improving or reducing the pay gap, the pay differential?

(Estelle Morris) No, that will be subject to the Comprehensive Spending Review settlement.

You understand that the differential, particularly for 16-19, between college budgets and school budgets has been significant. Do you think that has increased since the transfer of funding to the LSCs for 16-19 funding for sixth forms?

(Estelle Morris) It should not have done. There is a real terms guarantee and the money has been passed back to schools. I think two-thirds of school sixth forms or providers have done better out of the new system than worse.

So if two-thirds have done better the differential would have increased.

(Estelle Morris) It was not intended to widen the gap but what is true ----

Has it happened?

(Estelle Morris) We have done nothing to close the gap. That also is subject to the spending review. It is a manifest commitment of the Government and an over-time move to close the gap but we have not made progress on that yet.

Coming back to the question of targets, and Meg Munn talked about Sure Start targets, in terms of the FE targets it is significant that the FE targets - the proportion of students with level 2s at 19, and the adult literacy and numeracy targets - also have not been achieved. Is there some relationship between the failure to achieve those targets and this widening gap between schools funding and FE funding?

(Estelle Morris) I do not think so. Just to put on record, we put more money into FE than the previous government. We have not put as much as they wanted and we have not put as much as we put into schools and early years, but we have reversed the decline. We have put more money in, both in capital and revenue. You are right about the level 2 target. We have not met that. Can I say just a bit about where I think FE is in terms of the cycle of reform. I look at each of my areas of responsibility in terms of the cycle of modernisation and reform, and I think FE was furthest away from that. So much of the early years has been about reorganising the structure and making sure that we have got rigorous inspection, making sure that we have got the intervention strategy to actually deal with under-performing colleges, and making sure that we have got a rewards and incentive structure to deal with good colleges. That has taken a lot of the resource, the effort and the energy in the first five years. We have seen some improvement. Some colleges have improved and there are improvement indices there. That is what we have had to do during the first term. I would be very disappointed if having put that infrastructure in place we did not see movement towards improvement in output targes and attainment targets over the second term.

Chairman

Secretary of State, just to tie that one down, we have got a Green Paper that many of us found very interesting and stimulating on 14-19, and it is this very area of FE that we expect great delivery from over the next few years if we are going to achieve the kind of ambitions that are really described in that paper. Are you saying that you are in there fighting like mad to get the allocation that could transform the FE sector? I am looking at the figures here: yes, schools up from 1996 to 2001, up plus 4 per cent; yes, you are right, adults, is up at 0.2 per cent. So you have reversed the decline but the Green Paper suggests that this is an area needing massive investment.

(Estelle Morris) I am fighting for all the areas of my departmental expenditure, as one would expect. I suppose I am going to be a bit like schools and get more but never actually tell anybody I have got as much as I want. I absolutely acknowledge that if you look at FE it delivers most of our targets. It is actually a crucial sector for the Government. It attracts those sectors of the community more often turned off by learning. I cannot ask it to deliver those targets unless we invest in a better and targeted way. We will have to wait until after the spending review, but I will be hugely disappointed if we do not increase investment in FE over the next five years.

At the sort of level which Lord Puttnam mentioned in his famous article when he says: "My message to Gordon [Brown] is very simple. If you believe that incremental improvements in educational expenditure will deliver you the country that's worth being prime minister of in five years' time, you are making a horrible mistake. If you want this nation to have a future in 2030, 2040, you've got to- in the same way you did in health - dramatically re-evaluate the level of expenditure required to produce the workforce, the citizens and the ethos of success that might just carry us through"?

(Estelle Morris) I am always interested in the views of individuals, and I am always grateful for pressure put on senior members of Government. I am the Secretary of State and I have got responsibility for making sure that the money is spent well as well. One thing on that, because this is important. I will tell you what the best thing has been about money in education in the last five years: it has been the stability. It has been the fact that we have had a stable economy. I worked in education when we got more money one year and had to cut it back the next year. That has not happened. I would always, always, always sooner go for steady growth and stability than massive investment one year and massive cutbacks the next.

Secretary of State, that is exactly the point, is it not? What Lord Puttnam is flagging up is the fear that Members of this Committee have, that there is a feeling out there, perhaps in places like Number Ten, that education had a good five or six years, now it is health's turn and education goes on a back burner. Is that the feeling you get?

(Estelle Morris) Absolutely not. I have never, ever, ever had for one moment that feeling at all. Not just by words but by actions. Both the Prime Minister and the Chancellor of the Exchequer have taken every opportunity during recent months to say that education remains a top priority. I do not think Lord Puttnam does not think that it remains a top priority. I suspect that what he is saying is that he would want even more than, probably, people have asked for. You could spend billions and billions and billions. I understand that. If you are asking me whether education remains a priority, of all the things I might worry about in terms of my doing the job, the fact that it is not a Government priority is not something that has ever caused me a moment's concern. It is, and it will continue to be so.

Valerie Davey

I think the department can be congratulated on one of its documents, and that is the last departmental report, which I think everyone, when they finally get a copy, will recognise is laid out in a clearer form than it has been for many years. So congratulations on that. It does show that it consists of extra spending and it does show that money going into schools. Having said that, what was the overall objective which you were hoping to achieve by this shift of money into schools? Secondly, will that level in schools continue, because I think one of the uncertainties in schools is that they can hardly believe their luck and are always questioning whether it will come for the next few years?

(Estelle Morris) I understand that, which is why some schools have actually got sizeable underspends themselves and are holding money in budgets. They are always waiting for the rainy day because they have been brought up to behave like that. Most heads will have got used to managing a diminishing budget, and (I say this in the gentlest of ways) managing an expanding budget is a different skill, and I do think that is part of the problem I have got with teacher workload and trying to remodel the workforce in the schools. I am running 30 pathfinders to try to find ways forward on that, which you may be interested in. Schools will not stop being a priority. If you actually look, we have got to maintain and expand all the time. We had massive investment to get the literacy and numeracy strategy off the ground, and we can keep that going because there is a point in the improvement cycle where you invest more than in other years, and I suspect that the biggest investment in literacy and numeracy was in its opening year. If we look at the profile of that expenditure it will change over time. School is important to us because we know that it is the gateway to higher education, further education, jobs, lower criminality, decent health and communities and all those things we care about. So we are not going to stop investing in schools. What we do have to do, however, is to not ignore other sectors as well. We are in a difficult game, really, because every one of my sectors can make an argument for being incredibly important, and they have all suffered from decades of under-investment. I do not want any of them to stop yelling for more money. I am not going to stop campaigning for more money with the Government, but I am happy to give that assurance to schools that they are not about to go off our agenda. Anybody who has been listening to what I have been saying over the last couple of weeks, I think, should see that.

Can I follow that up by saying that clearly you will need to justify that extra expenditure. Can you indicate what evidence is coming forward of the relationship between the extra money you are putting in - we are putting in - and the performance in the various sectors which you have indicated already - not just academic?

(Estelle Morris) Yes. It is varied. EMAs, for instance, have brought about evidence of increasing participation. It is very, very early days yet on attainment levels but there is increasing participation. Excellence in Cities has brought about evidence of reductions in exclusions, improvement in attendance and a faster than national average rate of improvement in GCSEs. There is the fact that the money put into numeracy is targeted so that the most under-performing LEAs - and those in the most deprived areas - get more money and it is good that Tower Hamlets is the fastest improving local authority. So, in general, I think the extra investment has brought about improved results. We are, quite rightly, as a department always being questioned by the Treasury, making sure that the money is spent to good effect. I feel quite strongly - and I do not want to be party political about this - that we have got a Government that has probably invested over a period of time more money in education and is more determined to make a difference than any other. We cannot waste it, because the chance might not come round again. I do not mind that pressure to always equate money to results, and the evidence is beginning to be there.

Paul Holmes

On the question of funding, whether it is in schools or - particularly I want to ask about - FE. You get the difference, which you have already touched on, between what the Government say they are putting in overall terms into a particular area and what the people on the ground feel that they are getting. One of the charts in your departmental report, on page 43, for example, talks about FE college funding. One chart shows total funding and shows that it fell for the first two years after 1997 but has gone up in the next three years, so that overall there has been an increase in total funding. However, the first part of the chart looks at funding per full-time equivalent student and shows that, in effect, over five years if you average out in real terms the amount spent per student there has actually been a fall from the baseline of 1996/97. If the baseline in real terms was 100, over the next five years the average is 99.4 per full-time student. So colleges in this instance - and schools sometimes - say that "Yes, you are saying there is an overall increase in money but what we are getting for core funding on the ground per student is down."

(Estelle Morris) But the other stuff is real money, it is not monopoly money, it is exchangeable for goods in the economy. I think TPI is part of the non-core funding on that. Let us just take TPI. I am rightly worried about the levels of FE pay, as Mr Chaytor mentioned. If you are in my position sometimes you have to use the levers you have got to bring about the change in behaviour you want to bring about. Sometimes, for a period of time, using ring-fenced, targeted money, is the only thing that will bring about a change in behaviour. So we have to move overtime to un-ring-fencing it, because it should always be a transitional state of affairs, to some extent. At the end of the day you have to trust that behaviour has changed and that people on the front line know best how to spend the money. I go back to the point that, you are right, the table says that, but all I am saying is that it is not unreasonable to be asked to be judged on the total amount of money that we put in, not how it was actually categorised in expenditure terms.

So you then move to the areas of ring-fenced money that schools or colleges have to bid for. They complain about having to fill in some of these forms and so on - the time and bureaucracy involved - and the fact that two-thirds to three-quarters are turned down so they are wasting their time. If I can give you one specific example from this year, the Learning Skills Council now administer the money for colleges, and one area they have responsibility for is the Standards Fund. The total Standards Fund budget for the next financial year is bigger than this year's, but the colleges overwhelmingly are saying that what they are getting from the LSC is less. So, for example, there are four colleges - three of which do not want to be named. One college this year got £208,000 for the Standards Fund, but for next year the LSC has given it £86,000 - a 59 per cent cut. Another college got £527,000 this year for the Standards Fund and next year it is getting £130,000. Another college got a 75 per cent cut. One college which is willing to be named, Amersham and Wyndham College in Buckinghamshire, this year they got £209,000 for the Standards Fund allocation, but next year the LSC will give them £32,000. Research by the Association of Colleges across all colleges is showing that, yes, there are a few who are doing better next year than this year but overwhelmingly colleges are reporting massive cuts of 50, 60, 70 per cent in what they are getting for the Standards Fund, yet the overall budget for Standards Fund that the LSCs have got to spread out is bigger. So the colleges are saying "What is happening?" There is a feeling that the LSC, for example, is top-slicing this particular budget at a national level and then passing it to the 47 regions, and the regions are top-slicing it so the money is going somewhere else - into bureaucracy or whatever - but the colleges on the ground are getting significantly less for next year than they have got this year.

(Estelle Morris) I must say, without being critical, I find it impossible to imagine why a college which is complaining it has had a 59 per cent cut would wish to remain anonymous. I do not understand that. I think they have an obligation, if their funding has been cut by that much, to say who they are so that I can look at it. Without saying who they are I cannot look at it. It is an absolute nonsense to remain anonymous. Just in terms of what your proposed explanation might be, I know this is something you covered, again, last week with the Permanent Secretary, the admin costs of the LSC are lower than the administration costs of the organisation that it has replaced. I do not have that fear. What it might be - and I would be very happy, given a bit more evidence, to look at that - is that sometimes you re-label money when it comes in through a different route. I do think we need to rationalise the Standards Fund as much as we have done in schools, and we need to do that over the next few years in terms of its complexity and bidding and the different funding systems. If colleges are actually saying to you "It comes in in a form that is difficult for us to deal with, or more complex than we would like" I would probably have a good deal of sympathy with that.

On this question of how much is spent on bureaucracy and what the LSC inherited from previous bodies, there are arguments about that. However, one thing that the colleges are worried about is that under the TECs there is clear evidence that the TECs diverted money from front-line education programmes into expanding TEC bureaucracy, which the LSCs are having to try to deal with, and there is obviously a fear when you see sets of figures like these that it is part of the same process happening again.

(Estelle Morris) I think we have told Parliament that we expect to make a £50 million saving in administration costs of the LSC, and I note that the accounting officer for the department has said that that will be delivered. I do not want to sound complacent, neither do I want to sound as though the LSC would wilfully keep money back from colleges or providers - it does not do that and it is not in the business to do that. It is right that both yourselves, as the Select Committee, with those powers you have, and us, as the department, always keep an eye on that. It is a very young organisation, it is barely a year old, it is just settling down and I think it has done quite well but there will always, always be the need to make sure that bureaucracy does not grow. Organisations have a capacity to grow their bureaucracy that defies belief sometimes.

Chairman: We will come back to OFSTED in a minute, Secretary of State, but we have to move on.

Mr Turner

Would you agree that one of the greatest fears that parents have for the future of their children is probably drugs?

(Estelle Morris) I think most parents are fearful about that; I cannot judge whether it is one of their greatest fears but it is certainly a fear.

What is your reaction to our colleague, Kate Hoey, who says that as a result of the Prime Minister's experiment on cannabis in Brixton many children are going to school "bombed out of their heads"?

(Estelle Morris) Miss Hoey, whose constituency that covers, is entitled to make the observation about her constituency. I think it would be wrong for anybody to portray the English secondary education school system as full of children who are going to school, because of drugs, "bombed out their heads". What is true, however, is that we have a growing drugs problem within this country. Children live in the real world, they live in the community and they are of an age where they often do take drugs, and I think that we would all agree that, sadly, drug-taking has increased. When they go into schools they go into schools as the people they were outside in the outside community. Miss Hoey will have to account for herself and the Home Secretary will account for the new drugs policy when he makes the announcement today. I take seriously any drug-taking in schools or children going to schools under the influence of drugs - of course I do - but to build up a picture that it is only happening in one LEA because of the change in drug policy, I think, is scoring political points and not addressing the real issues.

You say that children go to school as they are outside school, and schools reflect what goes on outside. Teachers, very often, are fighting a very difficult battle to prevent the infiltration of some of the external culture into schools. Is it not really making their jobs much more difficult by allowing people unmolested to smoke cannabis at the school gates?

(Estelle Morris) I have no evidence that that is the case. One of the initiatives I announced some weeks ago was an expansion of the Southwark project of having police based in schools, where that is the wish of the headteacher. In Kate Hoey's constituency that is one of the LEAs which is covered by our behaviour initiative, and that is one of the LEAs that will have funding provided directly by the Government, directly from my department with the Home Office providing the police funds as well, to make available police based in schools, to work with heads, if that is what they wish. I just think that drugs is such a big issue, it is an issue in Birmingham and it is an issue in every one of your constituencies. I think we have to face up to this and talk about it, and talk about education and prevention. My good colleague, the Home Secretary, is doing exactly that. I applaud the fact that he is trying new ways to deal with this problem. Of course he will evaluate it - he is bound to do that - but if you are asking me, whether my department has been over-burdened with extra complaints from schools in Miss Hoey's constituency that life has been made more difficult, my understanding is no, that is not the case.

Of course it happens in every constituency, I am not suggesting for a moment it only happens in Miss Hoey's, but you will have heard, perhaps on the Today programme this morning, about community workers from the Stockwell Park estate saying "It is all very well for Prince Harry if he has a spliff, he can be told what the consequences are" (and I am paraphrasing). The signals going out from the Government are that in working class communities, like Brixton, they do not care as much about the kids in those communities.

(Estelle Morris) I do not think there has been one message from this Government, across the five or six years we have been in power, saying that we do not care for children in areas like that. All the investment in my department is targeted at areas like that. It is this Government, and my department, delivering the basic reading and writing for kids in areas like that. I will tell you what, one of the things that might actually keep them away from drugs is a decent education, higher expectations, basic skills when they go to secondary school, good comprehensive schools in which to be educated and hope for the future. I take great exception to any allegation that this Government has done anything other than care for children, whether they are children in middle-class, rural, urban areas, north, south, east and west.

Jonathan Shaw

Just a supplementary on that. I understand there was a survey of all the teachers within the trial area and my understanding was that one of them reported any concerns. Perhaps you could look into that and feed that information back to us.

(Estelle Morris) I would be delighted to do so.

Secretary of State, the issue of accommodation centres has concerned a number of Members of Parliament. There was an Early Day Motion with 140 signatories and 100 of those were Labour MPS, but there was not an opportunity through time, procedure, etc, to debate this issue recently during the Immigration Bill. There have been concerns that your department has been bounced on this issue - a policy imposed upon it by the Home Office. Can you tell us whether you and (if so, which) senior civil servants were involved and at what stage of the evolution of this policy?

(Estelle Morris) Of course I was involved. It concerns my department, of course I was involved. I was not "bounced" into it. I am not prepared to be bounced into decisions like that. Clearly, the order of events was that the Home Secretary was already dealing with the issue of accommodation centres and thereby consulting across government as usual. I both wrote and - probably - spoke personally to the Home Secretary about that. I speak with the Home Secretary a great deal and I have probably covered that. Of course I spoke to him before the announcement was made in public or before further consultations around Whitehall took place.

It is, on any measure, a significant departure from the 1994 principle of where universal education is available to all children, so at what stage were these discussions in terms of the White Paper or was your view and the Department's view involved in considering how this educational provision may work?

(Estelle Morris) Yes, of course we were. We were consulted and I had discussions before anything was put in the public domain. Indeed I remember that one aspect of developing that policy was the continuing role of the Local Education Authority in terms of the education that was made available in the accommodation centres. I even recall, though it was a few months ago now, the nature of some of those discussions. My starting point was that if the Home Secretary had come to me and said that he wanted to change and upturn the standard and quality of education for asylum seekers which was absolutely brilliant, I would not have objected to it, but my belief has always been that partly because of the length of time it takes to deal with the applications for asylum seekers and partly because we seem to have a housing policy that moves these families about from one place to another, we are not getting the best deal and the best ability from schools that we might have, so we did not have an ideal position.

When you arrived at that view, did you seek the views of schools that were providing education for asylum-seeker children?

(Estelle Morris) I fed into the paper produced by the Home Office, but the consultation on that has obviously invited a number of letters. I myself ----

You were saying that you formulated your view prior to considering the information which would be available to your Department as to what schools were experiencing for children who were seeking asylum.

(Estelle Morris) I do not live in ivory towers and I am sure you did not suggest that I do, Mr Shaw.

I did not.

(Estelle Morris) But when I am with schools and with headteachers and if somebody comes up with an idea, I have not got a blank piece of paper in my mind so I only go and talk to somebody so I can form a view. One of the things that teachers, especially in inner cities, have said to me ever since I have been in the Education Department is that one of the things they have sometimes found difficult to deal with is huge pupil mobility. It is a real issue for schools that we do not have the answer to. It is one of the things I do worry about and it can almost keep me awake at night. I think pupil mobility, especially in London, is a huge issue. I knew this before the consultation started, that some of those students, those pupils who have the most mobility is because of the way we deal with asylum seekers at the moment which is actually to juggle asylum seekers. I know you do not think that, but there is a feeling out there in schools that some of these children are kept in accommodation centres, education accommodation centres once it has been determined that they have got the right to stay in the country and this is, by necessity, short-term. When someone offers me a solution which might give stability, the same teaching targeted to their needs in one place for a period of six and up to nine months, I make a judgment that the needs of that student might be better met than their being in a number of schools over even a longer period.

I have not said what my view is, Secretary of State. Will the teachers in accommodation centres be qualified teachers?

(Estelle Morris) Yes. Let's be clear about this: the roles would be no different than that which apply in a school and there can be people without qualifications, QTS, that teach in school. That is my only caveat there.

My final point is that the Home Secretary said that if children were in an accommodation centre for longer than six months, their education would be reviewed. How would it be reviewed and what involvement have you had in terms of that review?

(Estelle Morris) I think both the Home Secretary and I hope that the asylum process would be such that it would have been determined within six months and I think that it is one of those catch-all things that I hope we do not have to deal with because I hope it will all be reviewed, but I think he was right to give that assurance and I think at that point as throughout the whole of the process because we have said it about children who have special educational needs that they might need an education which cannot be done in the accommodation centres, that their needs must be assessed and ----

In accordance with the code of practice, would that apply?

(Estelle Morris) Yes, the LEA still has responsibility for the education that goes on in the accommodation centre and what we need to do now is to work out the detail, and we have not got any yet, it might be a little while arriving. I still have not talked to LEAs in any depth or my own officials about how exactly that assessment will be made of special educational needs, but there is a top-line commitment that if it cannot be met within the accommodation centre, it will be met elsewhere. The general direction is I want to give these children stability, the same teachers, if we possibly can, maybe the beginnings of learning English if they have not got that so they can cope with mainstream school. I want to improve their education and not detract from it.

Chairman: Secretary of State, the Committee is very minded to look at this area in one sense in terms of the mobility of children through schools, especially in urban areas. In an urban area, like my own constituency, where there is a focus for a particular group of political refugees coming from a particular country, the impact on local schools can be quite catastrophic if a large number of children arrive in short order and then move on. We have seen examples where schools are just getting used to a group of children and then the children are whisked away and the whole school suffers from it. Actually schools in my own constituency suffered because they were just building a relationship with the children and then they were moved on, so we are minded to look at that at some stage.

Mr Simmonds

Secretary of State, are you in favour of satisfying parental first choice at both the primary and secondary school levels?

(Estelle Morris) If we could, but we do not have a situation where every parent can have a first-choice school.

But is it your ambition that you would like to see it, wherever possible?

(Estelle Morris) Wherever possible, yes. I think it is a legitimate thing to want to satisfy where parents choose to educate their children.

Is it true that the Department has been putting pressure on Local Education Authorities to fill spaces in perhaps less popular schools where currently there are vacancies rather than perhaps providing additional funding to successful schools to allow them to expand and then take in their first choice?

(Estelle Morris) There are two things. When we reorganised infant education to deliver our class-size pledge, we were absolutely insistent that LEAs expanded their good and popular schools and indeed many parents were more likely to get their first choice in that age group because there were more places in the popular schools. We did that and it cost the nation. It was a decision by us to actually invest the nation's income in that to good effect. I think there is a real issue there and I am interested in that if we can expand the popular schools to better meet parental demand, we should do it. There are just two things. What is a popular school and parental demand sometimes change over time, so we have to be careful of that. What can be popular one year is not popular the next. What I would say to LEAs is that when they are looking at the pattern of provision and if they are short of places, I would really welcome them choosing to meet some of the demand for extra places by expanding popular schools. I go further than that, that if a school is not doing well and parents do not want to send their child there, and the LEA takes the decision that it cannot be turned round and it should be closed, I am entirely happy if it is the LEA's decision to come forward with a plan to expand a nearby popular school. In essence, I would agree with you, but I would add a word of caution that you cannot just go in and put in new buildings for what essentially is five, six, seven forms of entry into secondary school overnight, but the gist of what you say is one that I would agree with.

Can I take you a little bit further into your view of the relationship between schools and Local Education Authorities and ask you for some clarity. I got sort of contradictory responses from your Permanent Secretary and one of your new Ministers about the potential expansion of more money going direct to schools and circumventing the LEAs. Now, in your view, is that something that we are going to see more of while you are Secretary of State, or will the whole thing stay the same or what route are you going to go down?

(Estelle Morris) Well, the situation will change a little bit because of the division of the LEA money and the schools' money in the new funding arrangements that are shortly to come in. We have pushed, as did the Conservative Government before us, for more money to be directed to schools, so we have always wanted to keep a very tight check that as much money goes to schools as it can. For instance, the special grant, the cash sum that has increased, I think it is called a special grant, though I think it has more initials than that, that goes to schools and yes, we are continuing that next year, as you already know, but we do not have plans to massively reorganise the financing of schools. However, for instance, we do adapt and learn as we go on, so the dedication of capital money direct to schools is something that has been expanded under this Government and the amount of cash was expanded last year and who knows what will happen next year, so again I am with the drift of what you say, but I would not want to give you the impression that we are about to abolish LEAs, cut them out or drastically change the way we fund the situation with schools.

Can I just go a bit further. In the Education Bill which is currently going through Parliament, there are obviously proposals to allow successful schools to innovate and have a degree or even a totality of autonomy from the Local Education Authorities by setting up companies.

(Estelle Morris) Yes.

Can I ask you, is it your ambition that all schools, and obviously we all hope that all schools will become successful schools, that all schools will become successful and, therefore, a vast majority of them, if not the totality of schools, will actually go down this route?

(Estelle Morris) The companies, which of course is now not in the Bill because the Conservatives, the Liberal Democrats and the House of Lords voted against it, and we will have to see about that when it comes back to the House of Commons next Monday, I think is quite innovative and it gives a vehicle, it gives the capacity to schools to actually manage more of their own affairs. Now, this could be as simple as jointly, which I am quite interested in, offering support of their expertise to schools which are not doing as well, but this actually puts it on a formal basis. I think we are evolving over time the nature of the relationships between LEAs and schools, and I do think times have changed over the last five years. I think that LEAs have, and I say this in the nicest way, it is not meant to sound patronising, grown up and realise that in the world in which we are they survive if they provide what schools want and what the nation wants. So when I am talking now with LEAs, that has been one of the great changes in the last five years, and again with recognition of the work that the previous Government did in talking about the role of LEAs, so I think what I want is for LEAs and schools to actually sit down and work out how services can best be delivered. I do not want a battle between schools, I do not want a situation where we say to schools, "You've earned that right to break away from the LEAs" because I am always left with the question, if that is right for some schools, why not do it for all schools? I think that has always got to be the bottom-line question. Don't give some schools the privilege that actually could well be used by all schools. The whole of the school company, the whole of that which operates school improvement, the whole of the selling services is about trying to find the new relationship between what LEAs do and what schools do. I am interested in shifting it and I look to our best schools to actually lead the way, but I do not have a clear view of where we might end up. I feel as though we are being innovative here and we want schools to actually show what can be done.

Chairman

Secretary of State, we will have the opportunity of looking at some of these issues in depth in your own City of Birmingham in September, from the 16th to the 20th.

(Estelle Morris) Indeed.

We are going there really as a response to Sir Michael Bichard when he contributed to an away-day and he challenged us to really get into depth in one city, one area, so have you any advice for us in terms of these issues where we look at the relationship between the Local Education Authority and schools in Birmingham?

(Estelle Morris) I am delighted you are going to Birmingham. You will be most welcome and I think you will enjoy it. It is a very good LEA which will be just about to lose its Chief Education Officer at the point at which you visit, so I hope you are able to visit while he is still there. I have to say, and I am hugely biased, but I sense that the relationship between the LEA and the schools in Birmingham is slightly different than the LEAs and schools anywhere else. I will tell you what I would look at. I would look at most how the LEA has kept a strategic role, but left schools feeling as though they are in charge of their own destiny and it has managed to do that trick in that probably schools both feel more empowered and yet they are the ones who most say that they want the LEA to have a role and that is what is different. Sometimes when I go to schools that feel strong and feel confident about themselves, they then follow it on with, "And I can manage without the LEA". In Birmingham I did a primary headteachers' conference only recently. What they said to a round of applause was that they were confident and strong, but they sought assurances from me that I would not cut out the role of the LEA, so the thing you should most look at is how it has changed over a decade from an LEA which I was quite honestly ashamed of to one that now has actually earned the trust of the schools and has found itself a niche in their everyday life.

That is most useful, Secretary of State. You were talking about relationships just now. Can I push you on the relationship which is especially important to you and that is your relationship to the Chancellor of the Exchequer and the Treasury. I wonder when you read or when you heard of perhaps plans to change the whole nature of child allowances and family benefit to support extended EMA, did that come as news to you or was that after a long period of consultation with the Chancellor?

(Estelle Morris) Sometimes I read things in the paper which I said and I do not even recognise them, so if any politician in the room actually reads things in the paper and believes that that is policy with the 'i's dotted and 't's crossed, they are mistaken. You will have to wait for the spending review announcement and it is not for me to comment on that. All I would say is that the EMAs have been successful in terms of participation. The Government has a Manifesto commitment to extend them, but I think we are almost at that commitment and I think the Manifesto commitment on that is that about one-third of the nation, so we will evaluate that policy in due course, but maybe at this time of year more than any other perhaps you will be able to speculate what might be in the spending review separately, but I am not about to speculate on that.

I am not asking you to speculate. By and large, you are feeling pretty positive about EMAs and their role, are you not?

(Estelle Morris) I am feeling pretty positive about my settlement, but I am not commenting in detail about any aspect of it.

Mr Pollard

Secretary of State, there is an acute skills shortage in the south-east particularly and that is so in some of our local economies, and modern apprenticeships is one thing. How can we encourage more kids into apprenticeships?

(Estelle Morris) We have to get them right to begin with and one of the problems is with the whole vocational route and, and again I am being generous today, I think the previous Government made huge efforts in this field as well. We have never ever got it right, never ever got it right. I bemoan the demise of the modern apprenticeship system. I think it was a model that actually could have been as relevant today as it was in its heyday in the 1940s, 1950s and 1960s and I do bemoan its demise. We have to make sure that the product is right and my colleague Mr Mitchell(?) can make sure that is the case. I will tell you how to do it. You assure them that it will lead to something in that if you think of yourself as a parent, you will only recommend a course of action to somebody if you think it will lead to somewhere, so we have to make sure that it is a robust qualification that leads to employment or leads to progression and routes into higher education. I am more confident now that the MAs will do that following the Cassells Report than perhaps a couple of years ago.

A plumber in my constituency can earn £55,000 to £60,000 a year, so I cannot understand why people are not encouraged. Further on from that, you have got an aim of having 50 per cent of young people going into higher education. What about the other 50 per cent? Is it not creating a 'them and us' in that if you are one of the 50, you are okay, but if you are not one of the 50, you are somehow not quite one of us?

(Estelle Morris) I take the point. There are two things on that. Do not forget that a lot of the people going to university will be doing their engineering and IT and they will not all be straight academics, but I take that point. We must not give a message that we are not as ambitious for the other 50 per cent who choose different routes and it is something I have reflected on over recent weeks and if that impression has been given, it should not have been and it must be something to which I will perhaps return at a later date.

Jonathan Shaw

Supply teachers. We raised the issue with Mike Thompson(?) and we raised it again in our report and the Government did not respond other than saying that they are the responsibility of the changes under DTI legislation. There are 20,000 now operating. Do you not see the need, given the shortage of teachers and the increased number of supply teachers, for the agencies to be regulated because a teacher can come to a school where I am a governor and we can say, "Don't send him again because he is not satisfactory", but the very next day he will be sent to another school, so should you not be looking at that?

(Estelle Morris) Well, we always should be looking at it, we always should be looking at it.

Particularly now

(Estelle Morris) Yes, of course. It is one of those things that supply teachers are always sort of on your desk and you never stop looking at it in some ways because it is such an important area. There are two things. There is my responsibility, my Department's responsibility, which is the checking process of those teachers who come as supply teachers, and then there is the regulation process which is DTI's. Certainly after recent events I started to discuss with the DTI the nature of the regulation and I do not have anything to say on that now, but I do take your point that if it grows and if they become more important, it is always crucial that you update the legislation and make sure you have got the controls you have got. I do not have anything more to say.

Another role for OFSTED?

(Estelle Morris) I had not thought of that, but given that you have mentioned it, it might be that you will say that that is a responsibility for OFSTED. I will just put a full stop by saying that we always have it on our minds and will keep it under review.

Chairman

Secretary of State, this is the second time OFSTED has come up in passing. There was a debate much interrupted by voting last week, but there was a concern expressed by not only myself, but others about this rapid growth of OFSTED. It continues to grow and it is around about 2,000 employees now. It is approaching half the size of your own Department and there is a worry that with this rapid expansion, and especially the amount of inspection that has to be done in the pre-school area, things can go wrong. The Committee is not saying or we were not saying in that debate that things had gone wrong, but there is a potential for things to go very wrong when an organisation expands at that rate and we worry about the quality assurance, the inspections, the inspectorate in this time of great expansion. What are your fears and worries about that or do you have any?

(Estelle Morris) I am glad the Department is so lean! That really is new!

We did not say that the Department was lean. We said OFSTED was catching you up.

(Estelle Morris) I think what we have done is make semblance of order in the inspection regime, so we actually look at the changes which have been made in terms of OFSTED in the early years and OFSTED working with the HMI. I think that is the right thing to do, but you are right in that when organisations grow like that, effective management of them becomes more crucial than ever. I have already obviously had the chance to meet with the new HMCI and I have every confidence that would happen, but I take your point that it is something that David Bell will have to manage and manage effectively, and that is the point of him doing the job. You are right to say, "Does it not mean there have to be greater management skills?" You are right about that, but in response I would say I am confident that we have got the right people in place.

You know that this Committee still is on record as wanting a share in the appointment of the inspector.

(Estelle Morris) I notice that, yes.

We do hope that at some time you might change your mind.

(Estelle Morris) Well, I hope we have got this HMCI for a few years to come, so that will not be actually at the top of the agenda for a while.

Mr Simmonds

Very quickly, following on from the point on OFSTED, can I get a feel for your views on whether you think that there should be a lighter-touch inspection process for successful schools than there is at the moment? A lot of schools certainly spend a lot of time pre-OFSTED inspection and with what I would term bureaucratic paperwork in preparation for the OFSTED inspection and a lot of them consider it a waste of time, particularly if they are successful. The second area is do you believe it would be an additional element to OFSTED's army to be able to arrive unannounced at a school so it is not polished?

(Estelle Morris) Yes, interesting. First of all, don't forget there is the shorter inspection, but, in principle, yes, I do agree that successful schools should have a more light-touch inspection. Teachers over-prepare for OFSTED. If you speak to David Bell or any OFSTED inspector, they produce more information than OFSTED has gone for and that is because they are conscientious people and it is high-risk stuff, but I wish they did not and that would help with the workload as well. I will keep my eye on that, but just to say that I know you would acknowledge that there are shorter inspections now for successful schools. In terms of unannounced, it is one of these debates which will go on and on and I can see the strengths of it. I can also see the drawbacks and the simple analogy I always use is yes, they arrive on Monday morning, the head happens to be away taking some children on an outdoor adventure for a week, and if I was the head, I would want to be in the school on the Monday morning when OFSTED arrive. I never would say that that is something I would never consider, but it has never actually got to the point where we would do it, so it is interesting, but we have no plans to introduce that at this moment in time.

Paul Holmes

The OECD did a study of 15-year-olds across a number of countries and that aroused a lot of interest and debate in Germany as to how they did not do so well in the comparisons. Dr Barry McGaw, who is the Deputy Director of Education at OECD, has spent some time analysing these and a few weeks ago he went into some detail analysing this study and his message from it was loud and clear. He was questioned on this and he was backed up. He was saying that the countries that did the best by the whole school population range were those which had a fully comprehensive education system and he named particularly Finland and Sweden, and he said the ones which did less well were those which had a selective system, and this is over the whole school population range they did less well, and he named the USA, Germany and Britain as examples where they do very well for the very bright kids, but less well for the other half to two-thirds of the population. It suggested that the sort of multi-tiered, hierarchical schools that he talked about in a recent speech will actually push us further down the avenue of being selective in schools and, therefore, we would do less well.

(Estelle Morris) I have a very short answer to that. I am obviously reasonably au fait with the recent report and I am not saying what you have quoted is not right, I am not saying that at all, but what I thought the main point of the report on that was that in England the link between social class and educational attainment is greater than in almost any of our competitor nations. Now, that is different from saying that the link between selection and a selective system and achievement is different, and I am happy to read the paragraph to which you draw my attention, but on that I was immensely proud of the tribute to our teachers' achievements, immensely proud, and it just confirmed my determination to try to do something about the link between poverty and educational attainment. What we really got from that report was that it need not happen. Other countries have overcome it and we should be able to overcome it as well.

Mr Chaytor

This week the Government published a document on the reform of standard spending assessment. In respect of education, do you want to see a closing of the gap between best funded and worst funded LEAs?

(Estelle Morris) I want to see the formula more accurately reflect the needs of each LEA.

Chairman

No one doubts your interest, enthusiasm, passion for the pre-school sector, the school sector and even the FE sector, but some people would say, I would not say it, that you are less interested in the HE sector and they would point to the fact that if you really look at the long-term future of our country, the spend and investment in HE, this Committee believes, its salaries in continuing and growing research and in the regeneration role of universities is so vital, so what do you say to your critics who say that is not really your focus and they use the illustration that we hear only this week, and our report is out tomorrow, but we hear on the grapevine, it has not been announced publicly, that yet again your own inquiry into student finance has been delayed until the autumn.

(Estelle Morris) It is not quite that. I am interested in higher education and I have both talked to Universities UK and I have visited numerous universities both old and new. I have had dinner with various vice chancellors, very pleasant it was too, and I have learnt a great deal. What is true is in terms of my own expertise and experience, I still have a great deal to learn in all my areas and particularly HE. I think we have spent some time finding out and preparing ourselves for the strategy document which we will announce in October and what you heard on the grapevine was actually an announcement by us that we will produce a strategy document at the end of October/ beginning of November ----

Strategy for the whole of HE?

(Estelle Morris) Yes, and what that will be will be a combination of many of the issues both I and Mrs Hodge have been talking to universities and students about over the last year, so it will not be a blueprint, but it will be a discussion document and I think it will be ample evidence that we have been thinking, doing, talking and listening a great deal about HE over the last twelve months.

And the cross-departmental inquiry?

(Estelle Morris) The cross-departmental inquiry into student finance, that will be part of it.

At the same time?

(Estelle Morris) Yes.

Chairman: Thank you, Secretary of State. We have enjoyed this session and thank you for being so frank in answering and fielding so many questions.